Change is inevitable for every industry, and accountants and financial analysts are known to stick to time-honored methods. The almost overnight transition to remote working that we have all had to make has not been easy. For industries, it has meant adapting to new work paradigms, and businesses, it has meant undertaking new technologies to remain up and running.
One of the areas that have emerged from new work-at-home regulations, and the changing pace of business is accounts payable automation. So, accounts payable automation seeks to shift from paper-based AP processes to intuitive, automated AP processing. The benefits of AP automation are being experienced by many businesses since the switch to remote working.
According to a report by PYMNTS.com, businesses seem to be taking the Covid-19 crisis as a signal for process updates, and 38% of enterprises said they were starting to automate their AP systems in 2020 up from 24% in 2019.
So, what does accounts payable automation do?
Well, to put it simply, accounts payable automation empowers businesses by freeing up cash flow and reducing manual tasks. With AP automation, you can manage approvals, manage invoices, and process payments with a single platform with switch approvals and better control and visibility on crucial financial data and processes.
According to a 2018 consumer report by PayStream Advisors, some 55% of enterprises tackle financial data manually. The manual processing of paper-based financial documents requires costly personnel, it takes excessive amounts of time and creates room for errors especially when documents are left sitting on desks.
Benefits of Accounts Payable Automation
Automating the accounts payable adds value to your mission-critical business processes and frees up your team to focus on more critical business activities. Here are some of the key benefits of AP automation.
Traditionally, invoices and financial documents would sit in drawers or wait in mailboxes for approvals. Automated routing achieved by AP automation cuts through glaring delays and automates the approval processes. Indeed, specific rules can be added to the workflow so that the right personnel automatically receive an approval request at the right time with programmable reminders.
For instance, Dashboards give users a real-time, high-level view of invoice processing, reducing the amount of time it takes to trace a particular status. So, looking at this trend, accounts payable automation translates to 18% fewer days according to Aberdeen. This saving equates to savings of about 5.55 days.
2. Streamlined and Accurate Processing
Accuracy is of strategic importance in financial processes. With AP automation, you get to enjoy automated matching processes which on average approve 80% of invoices from capture to payment. In streamlining accurate processing of accounting data, the AP automation process achieves the following:
- It eliminates human error
- It virtually eliminates overpayments and duplicate payments
- It does not require the same level of oversight as paper-based invoice processes
- It automatically detects and flags exceptions to be reviewed by the authorized approvers
- It makes budgeting, reporting, and auditing far more accurate and efficient.
3. Low-Cost Invoicing
Business process automation cuts labor costs and cuts down on other hard costs such as office postage for interoffice mail. The average monthly cost to process 5000 invoices manually is approximately $64,500 according to data fetched from APP2P Network. Processing this same number of invoices in an automatic system would cost $8,800, saving roughly 85% in invoice processing costs.
4. Enhanced Insight
AP automation software provides a clear window of the payment cycle, particularly with its comprehensive dashboard. With AP automation, it’s easy to trace where an invoice is sitting and who is responsible for its approval. Data can be exported and imported in real-time and access is granted upon request. That synchronization is perfect for analysis and reporting at the end of business cycles.
5. Fraud Protection
According to the Payments Fraud and Control Survey, an average of 81% of companies were targets of payment fraud in 2019. Accounts payable automation software can help you safeguard against invoice fraud by controlling which accounting staff is responsible for what approvals.
You can easily design approval workflows with different personnel and schedule changes or automation when needed. With such a process system in place, no single employee serves as the sole party for approving payments. This automation not only reduces the chances of fraud but also helps you double-check for incorrect or missing data.
6. Integration with Existing Systems
AP automation software integrates with your enterprise database, ERP, and other major financial systems. There’s no need to log in and out of different applications or re-enter data to multiple systems, which creates a wide margin of error. Easy integration with existing systems and applications creates interoperability, better collaborations, and improved productivity across departments.
7. Real-time Monitoring, Easy Access, and Greater Control
Chief financial officers and accounting staff want to know where every cent is at any given moment. The financial staff wants to keep a trace of every obligation owned by every party in the organization. Accountants also want to avoid paying late fees and impairing their relationships with trusted vendors.
Unfortunately, with paper-based processes, the paper gets lost and people are likely to lose track of where invoices stand at a particular point in the payment process. Accounts payable automation helps you save effort and time that can be focused on other business areas.
By allowing full-time access to the payment cycle, the accounts payable system allows anyone with permission to learn about the status of an invoice or any other financial document at a glance. And since you can monitor accounting workflows from your monitor, it is easy to pinpoint delays, discrepancies, and errors and get answers from your team.
ProcurePort – Selecting Your AP Automation Solution
ProcurePort offers you an opportunity to discover just how much automation can help transform your accounts payable and achieve your objectives months ahead. By utilizing AP software from specialist vendors like ProcurePort, you enjoy additional benefits such as improved business relationships, better transparency of financial data, and early payment discounts.
Visit ProcurePort for any inquiries and timely solutions in AP automation.